Trying to understand dates regarding CGT changes (for goodwill)

Trying to understand dates regarding CGT...

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Do the new restrictions on CGT & ER on goodwill transferred from a sole trader to Ltd co apply to incorporations after 3rd December 2014 OR goodwill transactions posted to the accounts after 3rd December 2014?

For example if ltd company incorporated in the summer 2014 the goodwill would need to be included in 2014/15 self assessment, but as this is filed after 3rd December is it too late?

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By User deleted
23rd Mar 2015 20:56

Date of incorporation

Relevant date is the date of transfer of business and goodwill to the company. Why should the filing date of the tax return matter?

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By Paul Soper
23rd Mar 2015 23:18

Ascertaining goodwill

The problem on incorporation was always determining the appropriate goodwill figure (although I suspect many plucked figures out of thin air - in taper relief days 4 x the annual exemption) so the best advice would be to leave the figure of goodwill on incorporation to be determined by using CG34 (connected person, MV, get HMRC to determine the figure) then deduct anything else from the total if you had one and the balance was share capital (known) and share premium (the rest).  So, you incorporate in June 2014 buty haven't ascertained the actual value until after the change in law.

BKD refers to 'the filing date of the return'; but that is not an issue in the original post, the issue is what is the date of the transaction, that is the date of incorporation even though the value of the goodwill is determined at a later date and the return is submitted after the law changes.

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Replying to paul.benny:
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By EstherG
24th Mar 2015 08:57

Incorporation date it is then

Paulsoper wrote:

So, you incorporate in June 2014 but haven't ascertained the actual value until after the change in law.

BKD refers to 'the filing date of the return'; but that is not an issue in the original post, the issue is what is the date of the transaction, that is the date of incorporation even though the value of the goodwill is determined at a later date and the return is submitted after the law changes.

 

That's what I wanted, thank you!

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By User deleted
24th Mar 2015 08:03

Sorry, Paul, but ...

... the OP did allude to the filing date of the return. And does my post not say exactly what you say in your 2nd paragraph?

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By johngroganjga
24th Mar 2015 09:07

Not wanting to be pedantic, but it's not the date of incorporation it's the date on which the business was transferred to the company. In some cases that might be the very day of incorporation itself, but I would have thought that it would be quite rare for a client and and his advisers to be able, or willing, to move with such lightning speed. What would be the point anyway? Why do a few days here or there matter?

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